Evidence of ‘gradual’ recovery emerges in June — Finance dep’t

BUSINESS leaders have reported the start of a “gradual” recovery in their sales starting June, Finance Secretary Carlos G. Dominguez III said.

“We have also learned from the industry leaders that business activities in various sectors of the economy have started to pick up following the economic standstill during the lockdown. In general, most firms reported that they have begun to see a gradual sales recovery in June, coinciding with the partial reopening of the economy,” Mr. Dominguez said in a statement Monday.

Mr. Dominguez, who has resisted pressure to spend massively at the outset of the crisis in order to keep some funds in reserve in case the pandemic is prolonged, warned that the government must perform a “difficult balancing act,” in terms of saving lives while minimizing economic damage.

He said evidence of the recovery is also showing up in the import volume and value-added tax data filed by the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR) in July.

The BIR surpassed its collection goal last month by 2.08%, generating P127 billion, while the BoC exceeded its target by 5% after generating P50 billion in duties and taxes.

Lockdown restrictions in the capital, along with the rest of the country, were eased starting June.

However, Metro Manila and nearby cities were returned to a stricter form of lockdown — known as modified enhanced community quarantine — for the first two weeks of August due to the continued rise in coronavirus cases.

He said reimposing lockdown measures will have an adverse impact over the short term but will ultimately benefit the country if it succeeds in slowing down the spread of the virus.

“The Duterte administration will not rest until we have prevailed over this extraordinary challenge. We will redouble our efforts to protect our economic gains over the past three years, prepare our economy for a strong recovery, strengthen our resilience, and solidify our return to the path of inclusive growth,” Mr. Dominguez added.

Mr. Dominguez is hoping for a “steady, yet moderate” economic recovery in the third quarter.

The economy contracted by 16.5% in the second quarter at the height of the lockdown, taking the first-half average to -9%.

Gross domestic product (GDP) should not decline by more than 2.2% in the second half to keep the full-year average within the government’s target of a 5.5% contraction.

Economic managers have set a GDP forecast range of -4.5 to -6.6% this year, against an earlier estimate of -2 to -3.4%. — Beatrice M. Laforga